After releasing her second album, Punisher, Phoebe Bridgers founded Saddest Factory Records on October 5, 2020.[2] The label's name, "Saddest Factory", was first coined on twitter by Phoebe Bridgers' former bandmate, Haley Dahl of Sloppy Jane.[2] The name comes from a mispronunciation of the word "satisfactory".[2][3] The label was founded as an imprint of Dead Oceans, and the first artist to be signed to the label was Claud.[4] On May 19, 2021, Muna became the second artist to be signed to the label.[5]Charlie Hickey was the third artist to be signed to the label, with a remake of "Seeing Things", featuring Muna, being released in celebration.[6]
Musician ScruffPuppie had previously been signed in August 2021[7] before being subsequently dropped in December 2021 following allegations of inappropriate behavior.[8]